In 2010, I created a set of goals. It was an aggressive list of over 27 goals broken into 9 categories. I’ve been working on those goals ever since. They weren’t exactly new year’s resolutions because I knew that was too much to expect but I think the categories might be a helpful way of determining where you need to improve most.

For each category above, I create a list of things I thought were critical and that I either aspired to do, or to continue to do. So, for example, under knowing God my list looked like this:

I choose the goal ‘Knowing God’ to show here because it is probably the most generic and many of these goals probably could apply to you as well. My goals under the other categories are very specific to my walk and may not apply.

I know, and science proves, that the highest achievers all have one thing in common… you guessed it, they set goals. So, I’m reviewing my goals before I start the year so I can make sure I focus my attention. I’m far from where I want to be and likely even farther from where God wants me to be.

Dick Wiedenheft is the pastor of Community Bible Church in Yorktown, NY. Given the current economic challenges, we recently talked to him about how he and his family budget and the advice he has for others who are trying to be better stewards of the finances God has given them.

Dick, I overheard you talk about you and your wife’s budgeting process and I thought it would be valuable for our readers to hear about it. First, why do you think budgeting is important and why did your family start?

According to creditcard.com, the average credit card user has $4,600 in credit card debt. When you consider the fact that a majority of credit card users don’t have any credit card debt and you focus on the remaining users who do, their average debt skyrockets to $16,000 per household. As a pastor, I can assure you, these people are in our churches.

People with this kind of debt, experience firsthand the practical wisdom given to us in Proverbs 22:7 “The rich rule over the poor and the borrower is the slave to the lender.” Financial slavery and the stresses that come with it are not what God wants for his people. Rather, he wants us to experience and model his generosity by being in a position to be generous to others (Eph 4:28).

This is where budgeting comes in. Each year we take in so much money and we spend so much money. The goal is to spend less than we take in, and it takes some organization to achieve this. My wife had a simple budgeting method which worked for her when she was single, and we carried this into our marriage. We wanted to know where our money was going and to make sure we had a plan to spend less than we earned.

Dick, what method has worked for your family? Are there any pitfalls that people should be aware of before starting to budget?

We currently use Quicken software (other budgeting programs include: Mvelopes, Mint, etc.) – it allows you to set a budget, to track all your expenses, and to check how far ahead or behind of budget you are. It even allows you to download transactions from your bank and credit cards. The main reason we went to Quicken was because we made too many math mistakes when we did it by hand!

But you don’t need a computer. We started with a small notebook. For each month, we’d write a column for each major expense we had (rent payment, utilities, groceries, savings, offerings, etc.). Then we’d write our budgeted amount for that category. Each time we had an expense in one of those categories, we’re write it below the total and subtract. the balance was our new Total. So we always knew instantly how much money we had in each category. At the end of the month, we’d flip to a new page and start over.

If we had gone over budget in a given category, we’d carry that negative number over to the new month and immediately subtract it from budgeted amount. That meant we’d be starting that new month with a smaller amount in that category. If we went under-budget and had a surplus in a category, we had some choices — we could carry that surplus to the next month, we could transfer it to another category, we could add it to savings, we could give it away, or we could buy ourselves a treat!

Do you and your wife ever disagree about how money should be spent?

Yes, like any other couple, money has the potential to be a big source of tension in our relationship. That’s minimized a lot because we have both agreed to live on a budget and we both try to stick to it. We sometimes have disagreements at the beginning of the year when we’re coming up with our budget, but once it’s in place, things go pretty smoothly because we have an agreed-upon plan.

Two other things we do to keep harmony is we have an agreement that neither of us will spend more than $100 (except on bills) without checking with the other person first. Also, we give each other a monthly personal allowance that we can spend on whatever we want. We have different values about what is worth spending money on, and our allowance gives us each some freedom to spend some money however we want without having to answer to the other for it. If I want to save up my allowance for months to buy a tech gadget and she wants to spend hers on a latte twice a week, we each have the freedom to do that.

In regards to debt, how do you recommend people manage it? Any advice?

This is a big topic. To keep it simple, I’ll focus on credit card debt and leave mortgages and car payments aside. First, it doesn’t work to ignore your debt and hope it will go away. It won’t! Getting out of debt requires the desire and discipline to deal with it. There are several ministries and organizations like Crown Financial and Financial Peace University who offer courses and materials which can really help here.

Second, anything you can do to pay down the cards with the highest interest rates or to transfer balances to a loan/credit card with a lower interest rate will save you from wasting your money on interest payments. Third, once you have your debt under control, you have to honestly ask yourself whether you have the self-discipline to charge only what you can pay off every month. Otherwise, you really need to cut up your credit cards.

Also, it can be really helpful to find a credit counselor. Some counselors charge a fee. Others are free because they get paid by creditors. You’ll need to do some research to find a good one. Credit counselors have saved people thousands of dollars on credit card and other debt payments. They can help you come up with a “doable” budget plan and then they will often negotiate with your creditors to reduce your interest rate or forgive some of your debt. Creditors would rather get some of what you owe them rather than none of it. If a credit counselor can assure a creditor that you have a plan in place and are being diligent, a creditor will often cut you some slack so you can make your plan work. Even if they won’t, often the counselor can help you come up with a plan and help you find the discipline to dig yourself out from your debt.

What if we create a budget and we find that our monthly expenses are greater than our income?

That happens from time to time when we have unexpected expenses, gas prices go up, or our post-tax income isn’t what we expected. Then, we’ve got to sit down and either lower our expenses or figure out how to bring in more income. We have to ask each other what we can do without for a while. Sometimes, if the expense was a one-time hit (like a major car repair), we might dip into savings to cover it, but this isn’t a permanent answer.